Markets move on data, but investors often move on emotion. At the 2025 Future Proof Festival in Huntington Beach, California, Hull Tactical spotlighted how its flagship fund, the Hull Tactical U.S. ETF (ticker: HTUS) uses a systematic, quantitative process to counter those emotional swings—offering advisors a potential tool to enhance portfolios while helping clients stay the course.
Aishvi Shah, financial engineer at Hull Tactical, sat down with The Wealth Advisor’s Scott Martin at the festival to discuss how the firm approaches market timing, why emotions often cloud decision-making, and how advisors might consider HTUS a complement to core equity allocations.
Making Sense of AI in Investing
Future Proof isn’t just about unveiling new strategies—it’s an event where advisors bring their biggest questions and hesitations. One of the hottest topics this year was artificial intelligence, where optimism about its possibilities often meets unease about how it’s applied in practice.
“I’ve heard an equal level of excitement but also fear because they don’t understand it,” Shah says. “I understand where the fear is coming from a little bit because it’s very easy to throw the name AI around, and I think a lot of people are, but AI is such a broad topic. You can’t really say that because AI can mean many things.”
For Hull Tactical, AI isn’t about opaque black-box systems replacing human judgment. Instead, it supports processes such as data cleaning and signal generation within a disciplined quantitative framework. “I’m glad that I get to tell people we’re not doing anything to be scared of,” Shah says.
How the HTUS Model Works
At the core of HTUS is a market timing model designed to balance opportunity with discipline. “We are very transparent about what we do,” Shah says. “We don’t want to hide anything.”
The strategy relies on about 40 indicators feeding into a signal that ranges from 0% to 200% invested. When those indicators align, the fund may increase exposure to as much as 150% of the market. When they conflict, HTUS simply holds long positions. “We’re not trying to say that we know everything,” Shah says. “So, when things are just going in conflicting ways, we’re just going to be long the market.”
Crucially, the fund doesn’t short the market. Instead, when signals weaken, it reduces leverage and holds more cash. The approach provides downside flexibility without layering on the complexities—and risks—of inverse exposure.
Removing Emotion from Market Highs and Lows
Hull Tactical’s philosophy is built on countering the biases that drive investors to make emotional decisions at turning points in the market. Professionals often assume new highs mean a downturn is imminent, while clients may clamor to buy in just as prices peak.
“It’s very easy to get scared by the market,” Shah says. “But the reality is, we’ve seen with the numbers, we’ve seen highs just go higher. We’ve seen highs come down lower. We try to take the emotions out of it and follow the numbers as they are.”
For advisors, that discipline can be valuable. Clients often remember the pain of downturns more vividly than the rewards of bull markets. “But that’s where we come in because we are not going based on our feelings of the matter,” adds Shah. “And we understand that it’s hard for clients and advisors to do. That’s why we’re saying you don’t have to take on the burden of this, and we are doing that for you.”
Seeking Incremental Alpha, Not Perfection
Market timing has long carried a stigma, often associated with bold predictions that rarely hold up over time. Hull Tactical positions itself differently, aiming not for certainty but for a statistical edge.
As Shah explains, “We are a market-timing model, but by no means are we saying we are 100% right or that we are right 100% of the time.” Instead, the goal is modest but meaningful.
“We are trying to provide 1%, 2% additional alpha, which to get that really you can even only be right 55% of the time,” the financial engineer adds. “So, that’s why I don’t come here and say this is our signal today: You should be bearish. You should be bullish. No. We’re just saying trust in the numbers.”
The modest edge, if delivered consistently, has the potential to compound into significant value for long-term investors. Just as important, the HTUS strategy seeks to maintain volatility at or below market levels, which may give advisors confidence in how it could fit into broader client portfolios.
Positioning HTUS in a Client Portfolio
For most advisors, the question isn’t whether to abandon core S&P 500 exposure but how to enhance it. Shah sees HTUS as a complement rather than a replacement.
That allocation could give clients a differentiated return stream while still anchoring portfolios to familiar benchmarks. And because HTUS is rules-based, it provides transparency into its signals—something Shah says the firm takes pride in.
At the time of the interview, HTUS was holding about 94% equity exposure, leaving 6% in cash. Shah describes the positioning as “just slightly bearish,” reflecting caution at market highs but not a full risk-off stance. That nuance illustrates how the model adjusts incrementally rather than swinging dramatically.
Why Advisors Should Pay Attention
For advisors seeking to differentiate their value proposition, a strategy like HTUS offers two potential benefits. First, it can take the behavioral burden off both advisor and client by relying on data-driven signals rather than emotional decision-making. Second, it seeks to provide the possibility of incremental alpha without requiring wholesale changes to a client’s allocation or increasing volatility.
Shah acknowledges that advisors may still feel uneasy about AI or market timing, but she encourages them to engage. “Hopefully, one thing that people can take away from this interview is to be a little less scared about AI. And secondly, we’re just a group of nerds that love to talk about what we do,” she says. “We don’t want to hide it. So, come up, ask us questions, and we’re more than happy to ease your concerns.”
The Bottom Line
Hull Tactical’s HTUS ETF isn’t about making bold market calls or promising perfect foresight. Rather, its aim is to use quantitative models to carve a small but persistent edge while keeping risk in check. For financial advisors, that means a tool that could complement traditional core holdings, help manage client behavior, and potentially add incremental value over time. Or, as Shah puts it: “Trust in the numbers.”
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Additional Resources
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Disclosures
Carefully consider the Fund’s investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in the Fund’s prospectus, which may be obtained by visiting www.hulltacticalfunds.com or calling toll-free 1-844-484-2484. Read the prospectus carefully before investing.
There is no guarantee that the investment objectives will be achieved. Moreover, past performance is not a guarantee or indicator of future results.
HTAA, LLC serves as the investment advisor. The Fund is distributed by Northern Lights Distributors, LLC (225 Pictoria Drive, Suite 450, Cincinnati, OH 45246), which is not affiliated with HTAA, LLC.
About the Hull Tactical US ETF (HTUS) Investment Strategy
HTUS is an actively managed exchange traded fund (ETF) driven by various proprietary analytical investment models that examine current and historical market data to attempt to predict the performance of the S&P 500® Index (the “S&P 500®”), a widely recognized benchmark of U.S. stock market performance that is composed primarily of large-capitalization U.S. issuers. The models deliver investment signals that the Adviser uses to make investment decisions for the Fund. The investment models used are to anticipate forward market movements and position the Fund to take advantage of these movements. Currently, signals are combined into an ‘ensemble’ array that spans statistical, behavior-sentimental, technical, fundamental, and economic data sources. This combined signal is generated each trading day towards the close of the market and dictates whether the Fund is long/short and the magnitude of position sizing. The Adviser routinely evaluates the performance and impact of each model on the Fund with the goal of realizing a risk/return profile that is superior to that of a buy and hold strategy.
The use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. These risks include (i) the risk that the counterparty to a derivative transaction may not fulfill its contractual obligations; (ii) risk of mispricing or improper valuation; and (iii) the risk that changes in the value of the derivative may not correlate perfectly with the underlying asset, rate, or index. Derivative prices are highly volatile and may fluctuate substantially during a short period of time. The use of leverage by the Fund, such as borrowing money to purchase securities or the use of options, will cause the Fund to incur additional expenses and magnify the Fund’s gains or losses. The Fund’s investment in fixed income securities is subject to credit risk (the debtor may default) and prepayment risk (an obligation paid early) which could cause its share price and total return to be reduced. Typically, as interest rates rise the value of bond prices will decline and the fund could lose value.
While the option overlay is intended to improve the Fund’s performance, there is no guarantee that it will do so. Utilizing an option overlay strategy involves the risk that as the buyer of a put or call option, the Fund risks losing the entire premium invested in the option if the Fund does not exercise the option. Also, securities and options traded in over-the-counter markets may trade less frequently and in limited volumes and thus exhibit more volatility and liquidity risk.
The thoughts and opinions expressed in the article are solely those of the author. The discussion of individual companies should not be considered a recommendation of such companies by the Fund’s investment adviser. The discussion is designed to provide a reader with an understanding of how the Fund’s investment adviser manages the Fund’s portfolio.
